Okla. House clears expansion of movie tax rebate

OKLAHOMA CITY (AP) -- House members approved an expansion of Oklahoma's film industry incentive package Wednesday, though its sponsor and a tax policy expert differ on how much the state can earn on its investment.

The Oklahoma Film and Music Office currently provides 35 percent rebates for local spending, up to $5 million a year, and is tapped out through 2014. Under a bill passed Wednesday, the office will receive $10 million a year through 2024, but rebates will shrink to 25 percent.

The bill's sponsor, Rep. Earl Sears, R-Bartlesville, told his colleagues that, for every dollar spent, $3 is returned to the state through catering, housing, wages and other expenses of movie-making.

"We have a golden opportunity to continue this rebate," Sears said. "They have to spend money here to receive this rebate. On the same token, we're bringing in an industry. We're bringing in an industry to showcase our state."

But Joe Henchman, vice president at the non-profit Tax Foundation, told The Associated Press in an interview that several states are holding the line on film incentives or dialing them back because they haven't seen blockbuster results.

"Every independent analysis undertaken by state governments has found that these programs generate somewhere between 10 or 20 cents for every dollar expended," he told the AP. He also criticized the idea that the incentives would kick-start a movie industry that would eventually be self-sufficient and wouldn't need the rebates.

"Once you turn it off, they disappear," Henchman said.

Oklahoma's film office has attracted movies produced by George Clooney and William H. Macy — plus the movie "Twister." The House, hoping for more projects, voted 55-30 Wednesday to keep the program with extra money through 2024, though some members tried to add hostile amendments. The bill's next stop is the Senate.

Henchman's group says about 40 states gave $1.5 billion in movie incentives last year, and that incentives are often used to attract filmmakers to locations domestically and abroad — such as "The Dark Knight" in Chicago and "The Lord of the Rings" trilogy in New Zealand.

Sears' hometown was one of two Oklahoma filming sites for "August: Osage County," an adaptation of an award-winning play scheduled for release this November. Meryl Streep and Julia Roberts are among its big-budget stars, and George Clooney is among its producers.

"Even though 'August: Osage County' was written about Osage County, we would never in a million years come to Oklahoma if there wasn't a rebate," Celia Costas, an executive producer for the film, told the AP in a phone interview from Los Angeles. "But because it had a healthy rebate, we decided to give it a try."

The film qualifies for the current 35 percent rebate, or a return of more than $5 million across two fiscal years, said Jill Simpson, the director of the Oklahoma Film and Music Office. That means the "August: Osage County" production spent almost $16 million within Oklahoma's borders.

"It was a huge amount of money just dropped in Bartlesville and the neighboring towns," Costas said, adding the majority of the film's crew was hired in Oklahoma. "We all lived right there and ate and dry-cleaned our clothes."

Simpson said the fund must be expanded or projects will go elsewhere.

"'Twister' would now not film in Oklahoma if we didn't have an incentive, I can assure you that," she said.

Rep. David Dank, R-Oklahoma City, said he'd be happy if the film industry didn't shoot in Oklahoma.

"I don't know where to start except to say: violence and crime and sex and vulgarity and debauchery. All of these things we're recruiting to come to Oklahoma," Dank said.